"The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded - which, as evidence shows, has no correlation with measured productivity. Both theory and evidence suggest that while patents can have a partial equilibrium effect of improving incentives to invent, the general equilibrium effect on innovation can be negative. A properly designed patent system might serve to increase innovation at a certain time and place. Unfortunately, the political economy of government-operated patent systems indicates that such systems are susceptible to pressures that cause the ill effects of patents to grow over time. Our preferred policy solution is to abolish patents entirely and to find other legislative instruments, less open to lobbying and rent seeking, to foster innovation when there is clear evidence that laissez-faire undersupplies it. However, if that policy change seems too large to swallow, we discuss in the conclusion a set of partial reforms that could be implemented." Written by economics professors Michelle Boldrin and David K. Levine, published in the winter issue of the Journal of Economic Perspectives. Via John Siracusa.

The patents system is there to promote progress, and I think it does meet some of its goals. I know patents get a really bad rep in the software circles because the dominant image of them is of them being trivial - the sort of things that someone could knock out lots of in no time.

The idea is to try and encourage, or force, companies to only patent things they genuinely believe are worth patenting, and want to put in production. By graduating the cost, companies will have to decide which of their inventions they want protection for. If a company has a single patent on a very popular and good drug, $50k per year is chump change. What it ought to prevent is a company submitting 10,000 patents just so every rival infringes on some obscure patent that the company doesn't think is really worth much, but allows them to extract economic rents from other players.

I wouldn't exempt existing patents. I might impose lower costs for existing patents - basically grandfather them in at lower rates. However the objective should be to prevent hoarding of patents whose only use is to prevent competitors from trying to compete at all.

One tweak that could be added would be to allow companies to turn over patents to the public domain and thereby relieve themselves of the cost of keeping patents they have no use for. So a company could either sell off patents that it has no use for, or could turn them over to the public domain.